Tiny Peso Creating Problem In Machines

April 6, 1985|By William H. Inman, United Press International

DALLAS — Devalued and shrunken in its native land, the new Mexican peso has taken on hefty monetary significance among coin machine operators north of the border -- it`s the same size as the U.S. quarter.

Echoes of concern are felt as far away as Las Vegas.

The new currency is worth less than a half-cent, but it can be used in place of the 25-cent U.S. coin in simpler types of vending equipment.

``They can buy all sorts of things with these coins,`` said Enrique Montalvo, mayor of the border city of Eagle Pass, Texas. ``Its impact has been very subtle until recently. Now all of a sudden, it`s a problem.``

Four pesos -- 2 cents -- can buy a car wash or a pack of cigarettes. Two pesos -- a penny -- can buy a week`s clean laundry. A single peso buys gumballs or a small toy at the front of supermarkets.

``It`s just wiping us out,`` said Billy Goldstein, president of Graff Vending of Dallas. ``We`ve lost thousands (of dollars), and had to switch to 10-cent (gumball) machines, which hurts our revenue.``

The coins have turned up far from the Mexican border, he said. ``They`re moving north. We`re getting a lot of them in the Shreveport, La., and Austin areas.``

And where the coin can`t fool the equipment, it often fouls it up, requiring costly service calls.

``Texas is the worst hit,`` said Leo Droste, executive vice president of the Amusement and Music Operators Association in Chicago. ``That`s where we`re hearing the complaints. They`ve called to alert us to the problem.``

Many merchants along the border play down the peso`s impact, or refuse to talk for fear of spreading the word.

``My boss told me not to say anything yet,`` said an employee of a Brownsville, Texas, Washateria. ``We try to keep it quiet. We`ve had quite a few of them and they hurt the machines. We have to take off parts to fix (the machines.)``

But scared merchants have fired off letters to government leaders seeking intercession with the Mexicans.

``We`ve sent word to all our state and federal representatives,`` said Montalgo. ``It`s been a real problem, and it`s sure to increase as people learn about it.``

Mexican banks report there has been no run on the coins, minted by the millions since they were introduced in November. In fact, they are generally shunned by the public. Coin shops are paying nearly a peso and a half for the much larger older pesos, now being phased out. The older coins contain more nickel than the face value of the currency.

In addition, the new peso is difficult to distinguish from the smaller 50- peso coin.

Officials in Las Vegas, home to more than 27,000 quarter slot machines, are watching the peso`s influx with trepidation. Quarters make up the largest quantity of coins used in the nation`s gaming capital.

``We`re always on the lookout for this sort of problem,`` said John Fournier, chief of Nevada`s gaming enforcement division. ``People drop a variety of bad coins in our slot machines. So far, we`ve had no outbreak of problems with the peso. But we`re watching carefully.``

``Our devices have what we call a built-in coin comparer. You simply slip in a quarter and the machine compares that quarter in weight, size and metal content with a quarter it already holds.

``If the coin is not exactly the same, it doesn`t accept the coin.``

Most vulnerable is the older, less sophisticated vending equipment, featuring a quarter-shaped hole for the coin -- machines often preferred by Laundromats and car washes.

``I understand a coin mechanism can be installed in the equipment to make it reject the peso,`` said Jim Lusk, executive director of the Texas Amusement Machine Commission. ``But that mechanism can be expensive.``

The peso perpetrators often have nothing to lose.

``There`s no way to prosecute somebody who uses counterfeit coins in our machines. It`s a form of fraud, but unless the merchant is there to see the person deliberately drop the coin in the slot, he`s stuck with the damage.``

The Amusement and Music Operators Association of America will send out a peso alert in its next nationwide mailing, said spokesman Droste.

``We`ve talked to a couple (of equipment) manufacturers and they have agreed to cooperate,`` he said. ``We`ve even given toll-free numbers to our members in Texas. They can call for advice on fine-tuning their equipment.``

He said industry representatives in other states have long dealt with troublesome Canadian coins the size and denomination of U.S. coinage, but worth slightly less.

``This has always been a major problem along the northern tier of states. But now most merchants figure it is just the cost of doing business in those states. They sack up the Canadian coins separately and take them to the bank for the exchange value, whatever it is.``